Preventing repo on late car loan?

Dear Driving for Dollars,
I've taken a leave of absence without pay from my work due to health issues. Since my income went to zero, I cannot make my car loan payment.

I sent a letter to my credit union about my situation and asked it to spread out the payments during my leave of absence of what remains on my car loan until I return from my leave of absence. They didn't respond.

More On Cars:

Now I'm two months behind, and they are sending me letters threatening repossession. How can I prevent my car from being repossessed?
-- Guillermo

Dear Guillermo,
If you can, send your lender at least a partial payment to show your good faith on your loan and to reduce the chances of the situation escalating further.

Call your lender or go there in person immediately to discuss your situation and call every day until the situation is resolved. Document every conversation, including the name and title of each person you talk to, and send any letters certified mail, so you have proof of your efforts.

Be polite but firm about your need to somehow restructure your car loan and ask for the next person up the management chain until you get someone in a position that can help you.

Lenders would prefer to have their customers pay on their car loans rather than repossess their cars, and since your leave of absence is temporary, they should be more likely to work with you. Be prepared to provide documentation from your doctor regarding your length of absence and assurance from your employer that you do have a job to return to.

Rather than ask for your payments to be suspended entirely, it may be more effective to ask the lender for a reduced payment during your leave of absence, with the remaining amount spread out over the rest of your car loan.

Get more news, money-saving tips and expert advice by signing up for a free Bankrate newsletter.

Ask the adviser

Bankrate's content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate's Terms of Use.

Tara Baukus Mello writes Bankrate's cars blog as well as the weekly Driving for Dollars column, providing both practical financial advice for consumers as well as insight into the latest developments in the automotive world.

Bankrate wants to hear from you and encourages thoughtful and constructive comments. We ask that you stay focused on the story topic, respect other people's opinions, and avoid profanity, offensive statements, illegal contents and advertisement posts. Comments are not reviewed before they are posted. Bankrate reserves the right (but is not obligated) to edit or delete your comments. Please avoid posting private or confidential information, and also keep in mind that anything you post may be disclosed, published, transmitted or reused. We do not permit the inclusion of hyperlinks in comments and may remove any comment that includes a hyperlink.

Bankrate.com is an independent, advertising-supported publisher and comparison service. Bankrate may be compensated in exchange for featured placement of certain sponsored products and services, or your clicking on certain links posted on this website.